A really interesting report. New York wants the cost of electricity to include the carbon tax in it – but they want real time data to determine the true amount of emissions coming from the plant at the exact moment that the electricity is being produced.
Since the electricity market is a constant process of generators bidding to buy electricity, these power plants will be placing bids with the carbon tax already integrated into pricing. This will have an affect on the economics of power plants.
Very interesting. I think we owe the New York regulators some cred for giving deep thought.
SOURCE: Another complexity is that emissions vary based on a plant’s heat rate, fuel type and where in the output range they are, she said. “In order to really know the carbon output, you need to know the exact heat rate as well as the fuel that’s being used at that moment and what the carbon content of the fuel is,” Bouchez said. The carbon price for generators subject to RGGI (Regional Greenhouse Gas Initiative) would be the social cost of carbon determined by the New York Public Service Commission minus the RGGI price. Generators not subject to RGGI, such as fossil fuel plants of less than 25 MW, would pay the full social cost.